Do you have a selection box around the symbol? I'm guessing that you do not, and hence the default selection area around the shape follows the extent of the data inside. Add one using Create -> Selection Box and choose Automatic (this is the IC61x menu, for IC5141 it is Add -> Selection Box). This should solve your problem.
In reply to skillUser:
In reply to Composter:
Have you considered defining some functions for your labels? The functions can be smaller strings so the symbol extents won't blow up.
procedure(myLabel() sprintf(nil "cellName: %s" ilInst~>master~>cellName))
The procedure name is then all that is needed for the ilLabel. The procedure can be defined in a file called libInit.il inside the library so it will automatically be loaded when the library is first accessed.